B Notice Q&A — First and Second “B” Notice (Updated 2025)

What is an IRS “B” Notice?

A “B” Notice is a backup-withholding alert you must send when you receive a CP2100 or CP2100A notice from the IRS.
It means the name and taxpayer identification number (TIN) reported on an information return (such as Form 1099) do not match IRS or Social Security Administration (SSA) records.

Why did I receive a CP2100 or CP2100A notice?

The IRS sends a CP2100 or CP2100A notice to payers when one or more accounts show missing or incorrect TINs.
A CP2100A notice is sent if fewer than 50 records are in error; a CP2100 is sent if there are 50 or more.
Both trigger the “B” Notice process described in IRS Publication 1281.

What is a First “B” Notice?

A First “B” Notice is sent to a payee when you receive a CP2100 or CP2100A notice for that account for the first time within three calendar years.
You must include a Form W-9 and ask the payee to provide the correct name and TIN.

The payee must return the signed Form W-9 to stop or prevent backup withholding.
You must send the First “B” Notice within 15 business days of the date on the CP2100/CP2100A notice or the date you received it, whichever is later.
Keep a copy of the notice and W-9 for your records.

For more details on how to handle the first “B” Notice process, see our CP2100 Notice and “B” Notice Guide.

What is a Second “B” Notice?

If you receive a second CP2100 or CP2100A notice for the same account within three years, you must send a Second “B” Notice.
Do not include a Form W-9.
Instead, the payee must contact the SSA (for Social Security Numbers) or the IRS (for Employer Identification Numbers) to validate their Name/TIN combination.

Individuals should provide a new Social Security card, and businesses must request IRS Letter 147C confirming their correct EIN.
If a validated TIN is not received within 30 business days after the CP2100/CP2100A notice date, backup withholding must begin.

What is the backup withholding rate?

The current backup withholding rate is 24% under Internal Revenue Code § 3406.
Backup withholding applies to interest, dividends, and certain other reportable payments.
Withholding must continue until a valid TIN is provided and verified.

When does backup withholding start?

If the payee fails to respond to the First or Second “B” Notice, backup withholding must begin no later than 30 business days after you receive the CP2100/CP2100A notice.
The withholding continues until the correct TIN is certified or validated.

What penalties can apply?

If a payee fails to furnish a correct TIN, the IRS may assess a $50 penalty per incorrect return.
Intentional disregard of the information-reporting rules can lead to much higher penalties under IRC §§ 6721 and 6722.

How can I prevent future “B” Notices?

• Always collect a completed Form W-9 before making payments to new vendors or contractors.
• Use the IRS TIN Matching Service to verify names and TINs before filing Forms 1099.
• Track all “B” Notices and responses to comply with the two-in-three-year rule.
• Retain copies of notices and correspondence for at least three years.

Where can I learn more?

For complete instructions, see IRS Publication 1281 (PDF).
You can also review related topics here on Accounting Portal:

• CP2100 and “B” Notice Guide

Updated for 2025 based on IRS Publication 1281 (Rev. 12-2023), “Backup Withholding for Missing and Incorrect Name/TIN(s).”